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U.S. Department of Labor Wage and Hour Division The Davis-Bacon Act (DBA)

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U.S. Department of Labor Wage and Hour Division DBA Enacted in 1931 Amended in 1935 and 1964 Protects communities and workers from non-local contractors underbidding local wage levels

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U.S. Department of Labor Wage and Hour Division DBA Requirements Payment of locally prevailing wages and fringe benefits to laborers and mechanics, as determined by the U.S. Department of Labor (DOL) Applies to direct Federal and District of Columbia contracts

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U.S. Department of Labor Wage and Hour Division DBA Requirements Applies to laborers and mechanics of contractors and subcontractors Performing work on the site of the work Must be paid not less often than weekly Wage scale must be posted at the job site

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U.S. Department of Labor Wage and Hour Division Coverage of the DBA Applies to contracts in excess of $2,000 to which the Federal Government or the District of Columbia is a party for construction, alteration, and/or repair, including painting and decorating, of public buildings or public works.

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U.S. Department of Labor Wage and Hour Division Criteria For Considering DBA Coverage Is the contract an agreement to which the U.S. or District of Columbia is a party? Is the agreement a contract for construction? Is the contract for construction a contract for construction of a public building or public work of the U.S. or the District of Columbia?

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U.S. Department of Labor Wage and Hour Division Lease Construction Contracts Factors to determine DBA coverage Length of the lease Extent of government involvement in construction project Extent construction will be used for private rather than public purposes Extent construction costs will be paid for by lease payments, and Whether it is written as lease to evade DBA

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U.S. Department of Labor Wage and Hour Division Terms Used in FLSA Workweek - a period of 168 hours during seven consecutive 24-hour period Hours worked - employees must be paid for all hours worked in a workweek Hourly rate - regular rate of an employee paid by the hour

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U.S. Department of Labor Wage and Hour Division Recordkeeping Protects employer Does not have to be kept in any particular form Must accurately reflect work time the employee works Must be maintained for three years Posting of FLSA poster

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U.S. Department of Labor Wage and Hour Division Independent Contractors (Factors to Determine Relationship) Extent to which services rendered are an integral part of principals business Permanency of relationship Amount of alleged contractors investment in facilities and equipment Nature and degree of control by principal

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U.S. Department of Labor Wage and Hour Division Independent Contractors (Factors to Determine Relationship) Alleged contractors opportunities for profit and loss Amount of initiative, judgment, or foresight in open market competition required for the success of claimed independent contractor, and Degree of independent business organization/operation

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U.S. Department of Labor Wage and Hour Division Purpose of CWHSSA (40 U.S.C et seq.) Enacted in consolidated a number of eight hour laws that provided for overtime pay on federally financed contracts employing laborers and mechanics In 1986, the federal daily overtime requirement was repealed to require overtime pay only after 40 hours a week Both CWHSSA and FLSA require overtime pay for work over 40 hours in a workweek

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U.S. Department of Labor Wage and Hour Division Requirements of CWHSSA Requires overtime pay for laborers, mechanics, guards, and watchmen at a rate of one and a half times the basic rate of pay for hours worked in excess of 40 in a workweek on covered contracts Liquidated damages can be assessed at a rate of $10 per day for each laborer or mechanic not paid proper overtime

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U.S. Department of Labor Wage and Hour Division Coverage of CWHSSA Covers contracts over $100,000 that require or involve the employment of laborers and mechanics on: DBA covered construction contracts DBRA covered construction contracts SCA covered service contracts Is self-executing (even if not stated in contract) Has no site of the work limitation

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U.S. Department of Labor Wage and Hour Division Purpose and Requirements of CA Prohibits kickback of wages and back wages Requires contractors on DBA/DBRA covered projects to submit weekly a statement of compliance Regulates payroll deductions

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U.S. Department of Labor Wage and Hour Division Permissible Deductions Without DOL Approval (29 CFR 3.5) Social security or federal or state income tax withholding Bona fide prepayment of wages Court ordered payments Fringe benefit plans with certain provisions Purchase of U.S. savings bonds Repayment of loans or purchase shares in a credit union

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U.S. Department of Labor Wage and Hour Division Permissible Deductions (29 CFR 3.5) Deduction to pay regular union initiation fees and membership dues provided by a collective bargaining agreement (CBA) Authorized contribution to charitable organizations such as the Red Cross, United Way, etc. Deduction for reasonable cost of board, lodging, or other facilities meeting the requirements of section 3(m) of FLSA Deduction for safety equipment - if not prohibited by FLSA, or required by law for employer to furnish

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U.S. Department of Labor Wage and Hour Division Deductions Requiring DOL Approval (29 CFR 3.6) DOL may approve payroll deductions when: Contractor makes no direct or indirect profit Deduction is not prohibited by law Deduction is voluntarily consented to in writing before work begins, or deduction is provided for under CBA terms Deduction serves the convenience and interest of employee

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U.S. Department of Labor Wage and Hour Division Purpose of PCA Provides labor standards for employees working on Federal contracts over $15,000 for the manufacturing or furnishing of goods, supplies, articles, or equipment

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U.S. Department of Labor Wage and Hour Division SCA Took effect in January 1966 Amended in 1972 and 1976 Most recent of government contract labor standards laws administered by the Wage and Hour Division (WHD)

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U.S. Department of Labor Wage and Hour Division Legislative History and Purpose of SCA To close the gap in labor standards protection between supply and manufacturing contracts subject to PCA and construction contracts subject to DBA To remove wages as a bidding factor in the competition for federal service contracts

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U.S. Department of Labor Wage and Hour Division Elements of SCA Coverage (29 C.F.R. §§ 4.107, & 4.110) Contracts entered into by Federal Government and District of Columbia Contracts principally for services Contracts performed in the U.S. Contracts performed through the use of service employees

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U.S. Department of Labor Wage and Hour Division Federal Contracting Agencies (29 C.F.R. §§ & 4.108) Agencies or instrumentality Department of Defense (DOD) Wholly owned corporations of the Government U.S. Postal Service Non-appropriated fund activities Military post exchanges (PXs) Contracts entered into by District of Columbia

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U.S. Department of Labor Wage and Hour Division Contracts in the US (29 C.F.R. § 4.112) 50 States, the District of Columbia, Puerto Rico, the Virgin Islands, Outer Continental Shelf, American Samoa, Guam, Wake Island, Johnston Island, and the Northern Marianas (Canton Island, Eniwetok Atoll, and Kwajalein Atoll are no longer a part of the United States) Any portion of a contract principally for services performed in the United States is covered

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U.S. Department of Labor Wage and Hour Division Contracts Not SCA Covered (29 C.F.R. § 4.134) Contracts primarily for something other than services, e.g., construction Contracts for leasing of space Contracts for professional services Federally-assisted contracts for services entered into by state governments, e.g., Medicaid and Medicare programs Contracts excluded by statutory exemptions Contracts excluded by regulatory exemptions

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U.S. Department of Labor Wage and Hour Division Federal or Funding Agency Responsibilities Ensure proper wage determination (WD) is applied Advise contractors which schedule of rates applies to various construction items Advise contractors regarding the duties performed by various crafts in the WD

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U.S. Department of Labor Wage and Hour Division DBA Requires Secretary of Labor to determine locally prevailing wages, including fringe benefits, for inclusion in bid solicitations and covered contracts. Based on wages paid to laborers and mechanics employed on similar construction projects in a local area (county-by-county).

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U.S. Department of Labor Wage and Hour Division Impact of Survey Participation Accuracy and Completeness of WDs depends on: Survey participation Level of construction activities Encourage contractors to participate Contact WHD Regional Offices to be notified of survey(s) see

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U.S. Department of Labor Wage and Hour Division Application to Covered Contracts 29 CFR 1.6 & FAR 48 CFR 22.4 Rules in 29 CFR Part 1 govern procedures for pre- determination of wage rates. Use and effectiveness of wage determinations are addressed in 29 CFR 1.6 and FAR 48 CFR General wage determinations are published on the Wage Determinations On-Line (WDOL) website:

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U.S. Department of Labor Wage and Hour Division Wage Determinations General Wage Determinations In most cases, general wage determination(s) are applicable Project Wage Determinations Rarely, a project wage determination may be appropriate.

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U.S. Department of Labor Wage and Hour Division General WDs Official site for General WDs – Issued for: Each major type of construction Most counties – nationwide May be used by agency without notifying DOL Questions regarding application of wage rate schedules shall be referred to the WHD Administrator, who shall give foremost consideration to area practice in resolving the question. 29 CFR 1.5; 29 CFR 1.6(b); FAR 48 CFR (a), b, and (c)(5).

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U.S. Department of Labor Wage and Hour Division Project WDs Application to specific project only. Issued at request of Agency if: No General WD in effect, or if A classification not listed on general WD will perform virtually all work (100%) on contract. Standard Form (SF) 308. Effective for 180 days.

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U.S. Department of Labor Wage and Hour Division Selecting Applicable WDs (29 CFR 1.1 & 1.6; FAR 48 CFR ) Location of construction project: State & County Type of construction: Projects of a similar character (DBA) Four general types of construction Current WD

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U.S. Department of Labor Wage and Hour Division Selecting Applicable WDs Type of Construction – AAM 130 BUILDING construction is generally the construction, rehabilitation and repair of sheltered enclosures with walk-in access for the purpose of housing persons, machinery, equipment or supplies (includes installation of utilities and equipment, both above and below grade). RESIDENTIAL construction projects, for Davis-Bacon purposes, include construction, alteration, or repair of single family houses, townhouses, and apartment buildings of no more than four (4) stories in height. HIGHWAY projects include construction, alteration or repair of roads, streets, highways, runways, taxiways, alleys, trails, paths, parking areas, and similar projects not incidental to building or heavy construction. HEAVY is not a homogeneous classification. Because of this catch-all nature, projects within the heavy classification may sometimes be distinguished on the basis of their particular project characteristics and separate schedules issued. Example: sewer & water line projects.

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U.S. Department of Labor Wage and Hour Division Selecting Applicable WDs Type of Construction – AAM 131 Some construction items in a project may fall into a different type of construction – Incidental to the principal type of construction, or Requiring a separate wage schedule.

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U.S. Department of Labor Wage and Hour Division Selecting Applicable WDs Type of Construction – AAM 131 Multiple wage schedules apply to different types of construction on a project: If construction items of a separate type of construction are: 20% or more of total project cost; or Will cost $1,000,000 or more.

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U.S. Department of Labor Wage and Hour Division AAMs Nos. 130 & 131 AAM No. 130 addresses Application Of The Standard Of Comparison Projects Of A Character Similar Under The Davis-Bacon And Related Acts. AAM No. 131 provides Clarification of All Agency Memorandum No AAM Nos. 130 & 131 are available at:

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U.S. Department of Labor Wage and Hour Division Selecting Applicable WDs – Up-to-date 29 CFR 1.6(c)(3); FAR 48 CFR 22.4 Current WD is applicable: WD in effect on date of award, except: For competitive (sealed) bids (not RFP): WDs issued less than 10 days before bid opening apply unless reasonable time is not available before bid opening to notify bidders & a report of this finding is inserted into contract file.

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U.S. Department of Labor Wage and Hour Division WDs Due to be Revised

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U.S. Department of Labor Wage and Hour Division Selecting Applicable WDs Up-to-date Extension - General WD: For contract not awarded within 90 days of bid opening, WD modification in effect on date of contract award applies unless extension of 90-day period is granted. See 29 CFR 1.6(c)(3)(iv) & FAR 48 CFR (b)(6).

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U.S. Department of Labor Wage and Hour Division Selecting Applicable WDs 29 CFR 1.6(f) & FAR 48 CFR DOL may apply a WD after contract award or start of construction due to: Failure to incorporate a WD into contract; WD used clearly did not apply – by its terms or regulatory provisions; or Wrong WD used due to inaccurate project description in request for WD.

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U.S. Department of Labor Wage and Hour Division Correction of Inadvertent Clerical Errors on WD At request of agency or on own initiative WHD Administrator may issue: Letter of inadvertence to correct the error. Corrections apply to bid solicitations and contracts retroactively to start of construction. 29 CFR 1.6(d) & FAR 48 CFR

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U.S. Department of Labor Wage and Hour Division Interpreting General WDs Cover Sheet Decision Number (Supersedeas) State County or City Covered Type of Construction Description of Construction Record of Modifications

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U.S. Department of Labor Wage and Hour Division Interpreting General WDs Cover Sheet State County Type of Construction Description of Construction Include and Exclude Language

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U.S. Department of Labor Wage and Hour Division Interpreting General WDs Cover Sheet Examples of inclusion/exclusion language: HIGHWAY CONSTRUCTION PROJECTS (Does not include building structures in rest area projects) HEAVY CONSTRUCTION PROJECTS (includes flood control, water & sewer lines, and water wells; excludes elevated storage tanks, industrial construction-chemical processing, power plants, and refineries) BUILDING CONSTRUCTION PROJECTS (Does not include Treatment Plants or single family homes & apartments up to and including 4 stories)

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U.S. Department of Labor Wage and Hour Division Interpreting General WDs Cover Sheet Record of Modifications: Lists all modifications of the WD Update union rates Results of new survey

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U.S. Department of Labor Wage and Hour Division Interpreting General WDs Body of WD CraftRatesFringes CARPENTER (including drywall hanging, metal stud installation, and Form building and form setting) $11.78$0.00 Laborer, common $8.01$0.00 SULA /15/2004

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U.S. Department of Labor Wage and Hour Division Interpreting General WDs Conformance Requirement Unlisted classifications needed for work not included within the scope of the classifications listed may be added after award only as provided in the labor standards contract clauses (29 CFR 5.5(a)(1)(ii)). Note: referenced clause reiterated at FAR 48 CFR (c).

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U.S. Department of Labor Wage and Hour Division Interpreting General WDs Appeal Process WAGE DETERMINATION APPEALS PROCESS 1.) Has there been an initial decision in the matter? This can be: * an existing published wage determination * a survey underlying a wage determination * a Wage and Hour Division letter setting forth a position on a wage determination matter ……………………

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U.S. Department of Labor Wage and Hour Division Conformance Criteria 29 CFR 5.5(a)(1)(ii) & FAR 48 CFR (c)(1) Work not performed by classification in WD; Rate must bear a reasonable relationship to WD rates; and Classification is utilized in the area by the construction industry.

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U.S. Department of Labor Wage and Hour Division Conformance Process – Contractor Contractor – After Award: Complete contractor section of SF-Form 1444 Include description of work, as appropriate Signature by subcontractor Signature by prime or general contractor Employee, if known (or representative) Documentation of views if in dispute Indicate if the request is for an ARRA project

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U.S. Department of Labor Wage and Hour Division Conformance Process - DOL DOL review: Is requested classification listed on WD or can a classification on WD perform the work? If not, does proposed rate bear a reasonable relationship to the rates already in the contract WD for the given county and type of construction. Verify classification is utilized area by the construction industry.

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U.S. Department of Labor Wage and Hour Division Conformance Process - Agency Upon receipt of WHD response, agency communicates DOL determination to contractor and other interested parties. Advises contractor and other interested parties of reconsideration and appeal procedures.

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U.S. Department of Labor Wage and Hour Division Review - Initial Contact Survey, WD or Conformance Action Initial contact on survey related matters should be directed to WHD Regional Office. Initial contact on WD and conformance actions should be directed to the WHD National Office, Branch of Construction Wage Determinations.

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U.S. Department of Labor Wage and Hour Division Review & Reconsideration by WHD Administrator Request to the Administrator, WHD: In writing Include supporting data Final ruling will be issued by the WHD Administrator May be appealed to the Administrative Review Board (ARB) – See 29 CFR Part 7

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U.S. Department of Labor Wage and Hour Division WDOL.GOV Created by an inter-agency task force that included DOL, DOD, OMB, GSA, DOE, and the National Technical Information Systems Links to SCA & DBA Wage Determinations Current, Archived, and to be Revised Library

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U.S. Department of Labor Wage and Hour Division Disclaimer This presentation is intended as general information only and does not carry the force of legal opinion. The Department of Labor is providing this information as a public service. This information and related materials are presented to give the public access to information on Department of Labor programs. You should be aware that, while we try to keep the information timely and accurate, there will often be a delay between official publications of the materials and the modification of these pages. Therefore, we make no express or implied guarantees. The Federal Register and the Code of Federal Regulations remain the official source for regulatory information published by the Department of Labor. We will make every effort to keep this information current and to correct errors brought to our attention.